|<<do you have a take on the macro-economy these days?>>|
Obviously, Steve, the economy is improving, although very slowly.
My view overall, which is based purely on my interpretation of what I read, and nothing more ... is that before things get significantly better, they will get worse, probably much worse. My time-frame ... between August, 2004 and March, 2005, the realities will be common public knowledge. And it will be ugly.
Huge macro-economic imbalances, most definitely, will return to the norm. That means that debt, as a percent of GDP, will return to the norm and interest rates will also return to the norm. What else? --- net foreign US investment, which is hugely negative, will also get closer to a balance --- the balance of international trade will do the same --- the dollar has much further to fall (and gold prices to rise). And all of this at pain to Americans and others around the world.
I painted this scenario to a number of the wealthiest people in this region in the last 6 months, and amazingly, they agree with me.
One person in particular, the Chairman and CEO of the largest bank in central Pennsylvania, with 47 branches, responded to my question (regarding the above) as follows.
"David, I said, how to we get out of these imbalances without a major financial and banking crisis in the US?"
"Ken," he said, "I agree with you completely. We can not ... but if you come up with an answer, let me know."